I Paid My Debt, When Will It Show on My Credit Report?

by Ciaran John ; Updated July 27, 2017

Creditors normally make monthly reports to credit reporting agencies. Consequently, if you settle an outstanding debt, your creditor should notify the credit reporting agencies of the payoff within the next 30 days. However, credit bureaus typically update credit reports once a month, so depending on when the bureau receives the information on the settled debt, it could take 45 days or more before your credit report reflects the debt as having been paid.

Consumer Protection

Credit bureaus are required to update consumer credit files when debts are settled. If you pay off a delinquent account but the debt continues to show up on your report, you must contact the credit bureau in question with evidence that you settled the debt, such as a payoff receipt. The credit bureau has 30 days to investigate your claim, and if you have a legitimate case, the bureau must update your report to reflect the payoff.

Paid-off Accounts

Negative credit events remain on your credit report for up to seven years while bankruptcies stay on your report for 10 years. Your creditors notify the credit bureaus of any payments that are more than 30 days past due. Even when you finally make these payments, the fact that you made the payment late remains on your credit report. If you default on a credit account and your creditors close it, when you pay it off, the fact that you defaulted on the account remains on your credit report but shows as "paid" rather than delinquent.

Reporting

Creditors do not legally have to make monthly reports to Equifax, Experian and TransUnion. Your creditors have to pay to establish a credit reporting relationship with each bureau, and to save money, many companies choose to only report to one agency. However, if you default on a loan, your bank may sell the debt to a collections agency and that agency may report to a different bureau than the bank. If you settle the debt with the collections agency, that agency must notify the credit bureau it reports to, but the report created by your bank may remain open. You can rectify this by contacting the other credit bureaus yourself.

Considerations

When you pay off a delinquent debt you should first contact your creditor and find out exactly how much you need to pay to clear the debt. Banks usually assess penalty fees and account close-out fees if you default on a credit card or loan. These fees are added to the debt and the credit bureau cannot remove the debt from your report until you have paid the total balance owed as well as any applicable fees.